Because Form 990 is a publicly disclosable document, any information entered in this block will be publicly disclosed (see Appendix D). For more information about applying for a PTIN online, go to IRS.gov/TaxPros. Enter the organization’s current address for its primary website, as of the date of filing this return. If the organization doesn’t maintain a website, enter “N/A” (not applicable).

Requirements to be Eligible for Tax Exemption

• Enter the balance of paid-in capital in excess of par or stated value for all stock issued and not yet canceled, as recorded on the corporation’s books.
• Answer “Yes” on line 16a if, at any time during its tax year, the organization invested in, contributed assets to, or otherwise participated in a joint venture or similar arrangement with one or more taxable persons.
• The same principles apply to items of other compensation paid or accrued by a related organization (applied separately to each related organization).
• By submitting Form 8868, you can extend the Form 990 filing deadline by up to 6 months.
• Generally, Form 8871 and Form 8872 are available for inspection and printing at IRS.gov/Charities-and-Nonprofits.

A disqualified person corrects an excess benefit by making a payment in cash or cash equivalents equal to the correction amount to the applicable tax-exempt organization. The correction amount equals the excess benefit plus the interest on the excess benefit; the interest rate can be no lower than the applicable federal rate. There is an anti-abuse rule to prevent the disqualified person from effectively transferring property other than cash or cash equivalents. If a disqualified person makes a payment of less than the full correction amount, the 200% tax is imposed only on the unpaid portion of the correction amount. If more than one disqualified person received an excess benefit from an excess benefit transaction, all the disqualified persons are jointly and severally liable for the taxes.

Part XI. Reconciliation of Net Assets

Churches, certain religious organizations, and organizations with gross receipts under $50,000 typically do not need to submit this form. Additionally, some federal or state government entities and specific types of trusts may also qualify for exemption. Many organizations that file Form 990, 990-EZ, or 990-PF must file Schedule B to report on tax-deductible and non-tax-deductible contributions.

• Report receivables (including loans and advances) due from other disqualified persons on line 6.
• The Form 990 serves as an open book, revealing the financial actions, mission, and management of funders.
• Amounts to report here include losses on uncollectible pledges, refunds of contributions and program service revenue, reversal of grant expenses, any difference between FMV and book value of property given as an award or grant, and any other changes in net assets or fund balances not listed on lines 5–8.
• This is true regardless of whether gross income from the unrelated trade or business is greater than or equal to $1,000 in such subsequent year.
• The IRS won’t redact the paid preparer’s SSN if such SSN is entered on the paid preparer’s block.
• If the organization didn’t file a Form 1099-NEC or 1099-MISC because the amounts paid were below the threshold reporting requirement, then include and report the amount actually paid.

Requirements for Nonprofits

The usual items included in cost of goods sold are direct and indirect labor, materials and supplies consumed, freight-in, and a portion of overhead expenses. Marketing and distribution costs aren’t included in the cost of goods sold but are reported as expenses in Part IX. For purposes of Part VIII, the organization may include as cost of donated goods their FMVs at the time of acquisition.

Organizations required to file Form 990 are tax-exempt, but their financial activities are subject to detailed scrutiny by the IRS and the public. Form 990 offers transparency by requiring organizations to disclose a wealth of information about their operations, finances, and governance. Given the complexity of the form, many organizations what does 990 mean seek assistance from tax professionals with expertise in nonprofit tax law. The 990-N is a postcard with minimal information that can be filed electronically. If you think that your status has been revoked, check the IRS list of revoked exempt organizations. All estimates and statements regarding program performance are based on historical client outcomes.

If the calculated member income percentage for a section 501(c)(12) organization is less than 85% for the tax year, then the organization fails to qualify for tax-exempt status for that year, and it must file Form 1120, U.S. Corporation Income Tax Return, in lieu of Form 990 or 990-EZ for the year. However, failing the 85% Member Income Test in one year doesn’t cause permanent loss of tax-exempt status under section 501(c)(12). So long as the organization’s member income percentage is equal to or greater than 85% in any subsequent tax year, the organization may file Form 990 or 990-EZ for that year, even if Form 1120 was filed in a prior year.

• In that case, the state may ask the organization to provide the missing information or to submit an amended return.
• If a change of address occurs after the return is filed, use Form 8822-B to notify the IRS of the new address.
• This is the section 162 standard that will apply in determining the reasonableness of compensation.
• However, you cannot file an amended return until the IRS accepts your original return, so you’ll have to wait to complete the process if, for example, you realize after the fact that you’ve sent in an incorrect return.
• If the home theater system in Example 1 sold at auction for $2,500 instead of $7,500, and all other facts in Example 1 remain the same, then the organization should report the following amounts in Part VIII.

You’ll see links to their filed 990s, key leaders in the organization, and other basic info such as their website and address. Reviewing your own 990s will reveal the financial health of your organization and program spending. If you’re a nonprofit pursuing funding through grants, 990 data will give you an edge. The Form 990 serves as an open book, revealing the financial actions, mission, and management of funders.

Essentials of Nonprofit Accounting

In column (A), enter the amount from the preceding year’s Form 990, column (B). If the organization was excepted from filing Form 990 for the preceding year, enter amounts the organization would have entered in column (B) for that year. If this is the organization’s first year of existence, enter zeros on lines 16, 26, 32, and 33 in column (A). The organization must enter the total amount of grants and other assistance made to foreign organizations, foreign governments, and foreign individuals, and to domestic organizations or domestic individuals for the purpose of providing grants or other assistance to designated foreign organizations or foreign law firm chart of accounts individuals.

• Answer “Yes” on line 15b if the process for determining compensation of one or more officers or key employees other than the top management official included all of the elements listed above.
• Member income doesn’t include interest income, gains from asset or security sales, or dividends from another cooperative (unless that cooperative is also a member).
• This section reveals the various programs run by the organization and the expenses allocated to each of these initiatives.
• For purposes of Form 990, Part IX, and Schedule F (Form 990), Statement of Activities Outside the United States, a person who lives or resides outside the United States at the time the grant is paid or distributed to the individual is a foreign individual.
• Answer “Yes” or “No” to indicate on line 2a or line 2b whether the organization’s financial statements for the tax year were compiled, reviewed, or audited by an independent accountant.

Exceptions to the Filing Requirement

Subordinate organizations in a group exemption which are included in a group return filed by the central organization for the tax year shouldn’t file a separate Form 990, 990-EZ, or 990-N for the tax year. A controlling organization of one or more controlled entities, as described in section 512(b)(13), must file Form 990 and not Form 990-EZ if it is required to file an annual information return for the year and if there was any transfer of funds between the controlling organization and any controlled entity during the year. Gross receipts are the total amounts the organization received from all sources during its tax year, without subtracting any costs or expenses. See Appendix B. How To Determine Whether an Organization’s Gross Certified Public Accountant Receipts Are Normally $50,000 (or $5,000) or Less, later, for a discussion of gross receipts. An organization’s completed Form 990 or 990-EZ, and a section 501(c)(3) organization’s Form 990-T, Exempt Organization Business Income Tax Return, are generally available for public inspection as required by section 6104.